Oil prices rocket on EU summit deal

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Oil prices rallied Wednesday on bargain hunting a day after a sell-off driven by the end of a Norwegian oil workers' strike and as traders digested an upbeat US energy inventories report.

US oil prices rocketed more than $7.00 a barrel Friday as buyers seized on the eurozone leaders' agreement on key crisis measures as a signal that demand could rise.

New York's main contract, West Texas Intermediate for August delivery, finished up $7.27 at $84.96 a barrel.

In London trade Brent North Sea crude for August surged $6.44 to $97.80 a barrel.

The burst of buying came after a summit in which the key leaders of the eurozone bridged differences to agree substantial new measures to support banks and help troubled governments cut their borrowing costs, and to sign off on a 120 billion euro ($150 billion) economic stimulus program.

The euro surged more than two cents on the dollar, another source of upward pressure on dollar-denominated oil prices.

"The optimistic news from the EU summit spread bullish signs across the oil market as crude oil prices rebounded strongly from recent losses," said Sucden Financial Research analyst Myrto Sokou.

Prices were up "primarily because of the summit and this positive news that came out," said Justin Harper, market strategist for IG Markets Singapore.

"Because the expectations were so low to start with, people really weren't expecting anything to come out of it and we've got some positive development, obviously a lot of money, $150 billion."

Harper remained dubious of the sustainability of the price jump.

"I think it's a short term rally, it could fizzle out because people have seen that there's still a lot of infighting between all the different member states," he said.

"They're attacking the short-term issues... there's still a lot of issues to be resolved so sadly I think (the rally) can't be sustained."

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